Japanese Stocks Little Changed, Dollar Up

Published 8:00 pm, Wednesday, June 25, 2003

Tokyo stocks were little changed Thursday after U.S. monetary authorities trimmed interest rates less aggressively than many investors had expected. The dollar was higher against the yen.

The Nikkei Stock Average of 225 selected issues fell 8.85 points, or 0.09 percent, to close at 8,923.41. The Nikkei rose 13.00 points, or 0.15 percent, on Wednesday.

The dollar was trading at 118.22 yen at 5 p.m. (4:00 a.m. EDT), up 0.76 yen from 117.46 late Wednesday and also above the 117.91 yen it bought late Wednesday in New York. The greenback ranged from 117.93 yen to 118.35 yen during the day's trade.

On the stock market, the Nikkei ran a deficit of more than 80 points in the morning session but made up most of it in the late afternoon.

Investors were unimpressed by the U.S. Federal Reserve's decision overnight to cut interest rates by a quarter percentage point instead of a half point as widely hoped to spur the world's largest economy, traders said.

The news weighed on shares in Japanese exporters, which rely heavily on sales in the United States. Electronics companies Fujitsu, NEC and Nintendo all fell.

The market's reaction mirrored the mood on Wall Street, where the Dow Jones industrial average closed down 1.1 percent and the Nasdaq composite index slipped 0.2 percent in Wednesday's trading.

But the gains by the dollar against the yen which inflate the value of Japanese companies' overseas earnings encouraged some buying in the sector. Honda, Toyota and Hitachi finished in positive territory.

The broader index in Tokyo also got a boost from buying of defensive shares such as railroads, utilities and food companies.

Gaining issues led decliners by 736 to 659 on the first, or main, section of the Tokyo Stock Exchange, while 130 ended unchanged.

The Tokyo Stock Price Index rose 3.33 points, or 0.38 percent, to finish at 887.86. On Wednesday, the Topix which includes more than 1,000 of Japan's largest companies fell 21.49 points, or 2.38 percent.

In currencies, the dollar gained against the yen in response to the smaller than expected U.S. rate cut, which forced traders who had bet on more dramatic action by the Fed to adjust their positions.

The euro bought $1.1507, down from $1.1528 late Wednesday in Tokyo. Against the yen, the euro bought 136.08 yen, up from 135.33.

The yield on Japan's benchmark 10-year government bond stood at 0.6250 percent, down from 0.6300 late Wednesday. Its price rose 0.04 to 98.78.